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Questions and Answers
Who is acknowledged for leading the FODE team towards the achievement of this course?
Who is acknowledged for leading the FODE team towards the achievement of this course?
Which organization co-funded the development of the book?
Which organization co-funded the development of the book?
What role did the English Department of FODE play in the course development?
What role did the English Department of FODE play in the course development?
Which of the following rights is NOT reserved according to the copyright notice?
Which of the following rights is NOT reserved according to the copyright notice?
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Which group contributed to the professional guidance in the writing process?
Which group contributed to the professional guidance in the writing process?
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What is the income per capita based on GDP?
What is the income per capita based on GDP?
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How does a rise in income per capita affect the economic growth of a country?
How does a rise in income per capita affect the economic growth of a country?
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What is one major factor leading to unequal distribution of benefits in development?
What is one major factor leading to unequal distribution of benefits in development?
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What does import-substitution manufacturing aim to achieve?
What does import-substitution manufacturing aim to achieve?
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What is one way the government redistributes income?
What is one way the government redistributes income?
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Study Notes
Circular Flow of Income Model
- Represents the movement of money within an economy, showing how households and firms interact.
- Key components include consumers, businesses, government, and foreign entities, each contributing to income generation and expenditure.
- Leakages (savings, taxation, imports) can reduce economic activity by taking money out of the circular flow.
Income Per Capita
- Current income per capita based on GDP is K1733.33; based on GNP, it is K2000.
- Rising income per capita indicates economic growth; a decline suggests a contraction in economic activity.
- Challenges include ensuring equitable distribution of national wealth among the population.
Government's Role in Economic Distribution
- The government allocates funds through the National Budget to various sectors, including health and education.
- Corruption hampers fair distribution, creating socioeconomic gaps between the affluent and impoverished.
Economic Independence and Self-Reliance
- Aims to produce goods and services domestically to minimize foreign dependency.
- Import-Substitution Manufacturing encourages local production to reduce imports.
- Economic policies target enhanced self-sufficiency and independence.
Inflation and Unemployment
- Government policies can conflict; reducing expenditures might lower economic activities, impacting employment.
- The Phillips Curve illustrates the trade-off between controlling inflation and unemployment rates.
- Stagflation occurs when there is high inflation and high unemployment simultaneously, often seen during economic recessions.
Economic Goals of Government
- Aims include driving economic growth, achieving fair wealth distribution, and promoting employment opportunities.
- National economic policies are necessary to maintain external balance and price stability, enhancing overall living standards.
Measuring National Income
- National income represents net values of goods/services produced over time.
- Measurement methods include production, income, and expenditure approaches.
Economic Challenges
- Balancing inflation control while fostering economic growth is a government priority.
- Fluctuations in exchange rates affect the price stability of goods and services, impacting citizens' living conditions.
Key Terms
- Stagflation: High inflation coupled with high unemployment.
- Leakages: Economic factors withdrawing money from the circular flow, reducing activity levels.
- Macroeconomics: Study of broader economic issues, including growth and government policy impacts.
- National Income: Total income earned by a nation's residents over a specified period.
Summary of Key Concepts
- Economic growth is indicated by increases in income per capita.
- Investment levels directly influence income generation and employment rates.
- Fair distribution of development benefits remains a significant issue, affected by governmental transparency and efficiency.
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Description
This quiz covers Grade 12 Economics Unit Module 1, focusing on the macroeconomic aspects of managing the economy. It includes topics on the circular flow of income model and the economic goals of Papua New Guinea. Test your understanding of these fundamental concepts in economics!
